Trade secrets case troubles UC Davis / Missing protein, ticket to China found in home of research worker

Tom Abate

Published 4:00 am, Monday, June 3, 2002

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UC Davis Professors Rivkah Isseroff (left) and Ivan Schwab are working on an experimental cure for a rare form of blindness. Photo courtesy of University of California, Davis

UC Davis Professors Rivkah Isseroff (left) and Ivan Schwab are working on an experimental cure for a rare form of blindness. Photo courtesy of University of California, Davis

Trade secrets case troubles UC Davis / Missing protein, ticket to China found in home of research worker

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A former research assistant at UC Davis is scheduled to appear in a Yolo County courtroom Tuesday on charges that he stole key ingredients in an experiment aimed at curing a rare form of blindness.

The attorney representing former UC Davis researcher Bin Han did not return calls for comment about the case, which is being investigated as a possible instance of economic espionage.

Han, 40, a naturalized citizen of Chinese descent, was arrested May 18 after co-workers in the lab of UC Davis scientists Rivkah Isseroff and Ivan Schwab noticed that 20 vials of an experimental protein were missing.

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UC Davis spokesman Paul Pfotenhauer said lab workers notified campus police, who obtained a search warrant and found what they said was the missing protein in Han's refrigerator. They also found a ticket for a flight to China due to depart the next day, he said. Now investigators are trying to determine whether Han acted alone or had encouragement from abroad.

The UC Davis case illustrates a growing concern that the biotech industry, just like the high-tech and telecom industries, has become a target for information pirates seeking to steal novel technologies and sell them overseas.

"I've litigated these kinds of cases for 30 years, and they have become more and more prevalent as our industrial base has shifted more to tech- oriented stuff," said Brock Gowdy, a trade secrets attorney in San Francisco.

There are no reliable estimates of the prevalence of economic theft against high-tech or biotech firms, in part because many cases are pursued in civil, rather than criminal, courts, and are settled without any judgment being recorded.

But there have been cases of trade secret theft involving the drug industry.

In 1999, a Taiwanese executive pleaded guilty to criminal charges that he tried to buy the secret formula for the anticancer drug Taxol.

The criminal charges against Han, filed under California's trade secrets act, allege that the scientist tried to steal material integral to the process that UC Davis researchers are developing to grow replacement corneas.

The cornea is the clear portion of the eye that admits light, and each year as many as 10,000 Americans lose their sight when some shock, acid burn or other accident damages the corneal tissue beyond repair.

Isseroff and Schwab have been working for years to extract stem cells from the cornea and to use these cells to grow what amounts to a natural contact lens to restore sight.

Although they have had some success, one of the challenges they face is molding these growing cells into the proper shape of the lens. Isseroff and Schwab recently decided to try growing their corneal lenses in a protein mix that the Sacramento biotech firm Thermogenesis is testing as a wound-sealing compound.

Han, a Ph.D. scientist who had worked at various research posts on campus since 1989, went to Thermogenesis in early May to pick up 40 vials of the protein mix, according to Pfotenhauer, the Davis spokesman.

About a week later, other lab workers discovered that they had only 20 vials and became suspicious. "They heard he had tickets to China," Pfotenhauer said.

He said that in addition to the vials of protein, campus police believe they found other lab materials in Han's house.

At Tuesday's hearing in Yolo County Superior Court in Woodland, authorities will argue that Han, who is being held in county jail without bail, should be considered a flight risk.

Pfotenhauer would not say whether the FBI, which investigates trade secret cases that involve a foreign connection, is involved in the Han affair. The FBI office in San Francisco did not return a call for comment.

But Phil Coelho, chief executive of Thermogenesis, said FBI agents visited his Rancho Cordova company shortly after Han's arrest and spent two hours asking questions.

The Han case could cause uncomfortable ripples in academic and biotech labs,

where scientists are aware of the competitive nature of their research, accustomed to working alongside scientists from many nations, and reluctant to engage in what would amount to racial profiling.

a government body set up to promote "economic security," and staffed by the CIA, FBI and other federal agencies, issued a curious alert about the South Korean government's plans to help create a biotech park near San Diego.

Though the directive made no allegations about spying, it nevertheless carried overtones of suspicion, using quotation marks to discuss how the park would facilitate "networking" with local researchers and create a "bridgehead" into one of the leading biotech centers in the United States.

The directive was picked up by the scientific press and ultimately by the San Diego Union-Tribune, which quoted the president of a local trade association pooh-poohing the implications of economic espionage.

"I don't think we should discriminate against the Koreans," Joseph Panetta, president of Biocom, said in the Feb. 21 article. "We don't have any indication they are any more apt to steal trade secrets than anyone else -- including the company down the road."

But Gowdy, the San Francisco trade secrets attorney, said, "Whatever the politically correct crowd would say . . . there are certain countries that have a need for technology and whose cultures are slightly more forgiving about efforts to steal ideas."

In the aftermath of the case of Wen Ho Lee, the Chinese American scientist who pleaded guilty to a single charge after investigators dropped 58 other counts of stealing nuclear secrets from a UC-run weapons lab, the Han affair raises the possibility that a similar climate of mistrust could come to haunt biotechnology.